By IANS, [RxPG] New Delhi, Feb 26 - Health activists and experts Friday expressed disappointment over the 'low' allocation to healthcare in the union budget and said more was needed to address the needs of the rural and urban populace.

'We are still very far from the three percent of GDP that needs to be allocated to the healthcare system to provide quality basic healthcare for all and to start to improve India's very poorly performing health care system,' Nisha Agrawal, chief executive officer, Oxfam India, said.

'The government's allocation for healthcare remains a paltry 0.36 percent of GDP in the 2010-11 budget,' she said.

Finance Minister Pranab Mukherjee Friday allocated Rs.22,300 crore - for the health sector in his 2010-11 budget, an increase of over Rs.2,700 crore over the previous fiscal.

Although Prathap C. Reddy, chairman of Apollo Hospitals Group, described the overall budget as commendable, he said healthcare still has major challenges.

'Our other significant challenges include severe shortage of health infrastructure and health human resources. We need to add 100,000 beds each year for the next two decades at a cost of Rs.50,000 crore per year. It would have been helpful if the government had shown encouragement by enabling an investment-friendly environment for this sector,' Reddy, who has been honoured with the Padma Vibhushan, said.

Added Save the Children, the world's leading independent children NGO: 'Government expenditure on health has gone down to 0.36 percent in 2010-11 from 0.37 percent in 2009-10.'

'If state spending on health remains constant, then combined centre-state spending on health will not reach the promised 2-3 percent by 2012. This is clearly in contradiction to the government's commitment to increase public expenditure on health,' the NGO said in a statement here.

Agreed R.K. Garg, director of Rockland Hospital. 'The total allocation of Rs.22,300 crore for health sector sound negligible. We were expecting a much more robust allocation looking at the demand in this sector,' Garg told IANS.

However, he said that the five percent reduction in tax while importing medical equipment will benefit the health sector, mainly the private sector.

Ranjit Shahani, president of Organisation of Pharmaceutical Producers of India, an association of research based international and large pharmaceutical companies, said the budget does not adequately address the healthcare needs of the nation.

But, there were some cheers too.

Bhavana Mukhopadyay, Executive Director of Voluntary Health Association of India -, welcomed the hike in excise duty on cigarettes. 'It is very encouraging. It is a step in the right direction.'

VHAI is an conglomeration of various NGOs working against tobacco consumption.

Pervez Ahmed, the CEO and Managing Director of Max Healthcare, also welcomed the budget.

'The healthcare industry appreciates finance minister's focus on improving healthcare systems in the country. Steps such as increased budget outlay for the health ministry will go a long way in improving the overall health scenario of India and the uniform, concessional five percent duty on all medical appliances will also have a mildly positive effect,' he said.